Do not invest more money than you can afford to lose.
Despite an increase in the number of clients, about one-third of the companies in the Russian professional securities market were in the red in the first quarter of 2016, according to the Central Bank of Russia’s (CBR) first overview of the professional securities markets participants. As few as 19 companies had a net profit exceeding RUB 100 million in the first three months of the year.
The number of clients of securities companies in Russia posted an increase of 18% to 2.8 million in the January-March period. Of these, 97.7% were individual investors. Active clients, or such with at least one transaction in the period under review, made up 9% of the total, or 254,300. Clients of non-banking financial institutions, forex brokers included, went up by just 1% from the beginning of the year to 1.3 million, while active clients accounted for 12% of all.
Overall, amounted to 832 at the end of the first quarter, down from 875 in the beginning of the year. Of these, non-banking financial institutions were 475 at the end of March, posting a decline of 5.2% from the start of the year.
Fewer market participants means that the market concentration is higher. As a result, 31 entities, equal to 6.5% of all securities entities in Russia, accounted for 30% of the non-banking financial market.
OTC trading volumes dropped 77% q/q
The total trading turnover of over-the-counter (OTC) instruments amounted to RUB 7.8 trillion in the first quarter of 2016, which is significant drop of 76.6% from RUB 33.3 trillion in the previous quarter. The reason for the large difference is that the combined volume of OTC transactions carried by non-bank financial institutions fell by 91% on the quarter to RUB 2.3 trillion in January-March. Brokerage transactions had a volume of RUB 1.5 trillion, accounting for 65% of the total non-bank trading volume.
Non-bank financial institutions had combined assets RUB 890.1 billion at the end of March, equal to 1.1% of the country’s gross domestic product (GDP). The figure represents a growth of 18.8%, compared to the same period a year earlier. Their combined net profit went up to RUB 23.7 billion from RUB 23.1 billion.
Meanwhile, the own funds of such companies went down by 1.3% year-on-year to RUB 182 billion. Own funds-to-assets ratio also declined by 3.9 percentage point over the year to 21% at end-q1, while the ratio of financial debt to assets increased by 1.9 percentage points to 19.8%.
Forex trading volumes made up 43% of overall on-exchange volumes
The forex market accounted for 43% of the trading volume on the Moscow exchange in January-March. The segment saw an increase, driven by USD/RUB spot contracts, which generated a volume RUB 31.7 trillion, or 70.5% up over the year.
Trading in futures made up 17% of the on-exchange volume after it nearly doubled on the year to RUB 35.5 trillion in the first quarter. Currency futures generated the highest volume of RUB 23 trillion, while commodity futures posted the highest growth to RUB 98 million from RUB 18.3 million.
Source: CBR
